Meeting poll promises a tall order in Punjab
Ruchika M Khanna
Chandigarh, January 25
No political party, be it the ruling Congress or those staking claim to wrest power from them — the Aam Aadmi Party, Shiromani Akali Dal-BSP, Sanyukt Samaj Morcha or BJP-PLC-SAD (S) alliance — is in a position to make good the promise made to voters ahead of the elections.
Also read: ‘Serious issue’: Supreme Court seeks Election Commission response on poll-eve freebies
So, even as different political parties in the election fray are offering free units of power (ranging from 300 to 400), enhancement in social security especially to the 1.008 crore women voters, interest-free loans, eight free LPG cylinders, or investment in infrastructure, delivering on these seems to be a tall order considering the dire straits the state’s finances are in.
Voters will have to factor this in before falling in to these sops offered during the eve of elections, warn eminent economists in the state. Sample this: Rs 1,000 per woman (over 18 years of age) dole promised by the AAP and Rs 2,000 per woman promised by the Congress will cost Rs 10 billion and Rs 20 billion per month, respectively, to the state exchequer. Eight free LPG cylinders a year to the 55.10 lakh households will cost over Rs 3,200 crore per annum!
Any party that gets the reins of the state on March 10 will have to deal with an outstanding debt of Rs 2.82 lakh crore, unpaid arrears of salaries of employees and arrears of pensions. A debt of Rs 16,248.68 crore has been added to the state till December 2021, with Rs 1,500 crore estimated to have been borrowed last month.
Unpaid bills worth hundreds of crores are pending with the treasury, which will also have to be cleared by the next government. Most of the market borrowings (Rs 10,418.40 crore of Rs 16,248.68 crore) have been used to pay interest on the outstanding debt.
Besides, the next government will also have to clear Rs 9,600 crore dues towards Punjab State Power Corporation Limited (PSPCL) for the unpaid power subsidy amount of this year and the new sops (waiver of arrears and pending power bills announced by the government). By the time the new government settles in, the power subsidy of the next fiscal (2022-23) will also be added (from April 1 onwards).
To make matters worse, the state will also lose the GST compensation it gets from the Centre, as the relief to states (for subsuming of indirect state taxes upon roll out of GST) will no longer be paid beyond June 2022.
This financial year, Punjab is to receive GST compensation of Rs 16,871 crore, of which Rs 10,672.13 crore has been received till November 2021. Though Punjab and several other states, including the BJP-ruled ones, have demanded that this compensation be continued for another five years, the Centre has so far not acceded to the demand.
What has been promised
Congress: 300 units of free power; Rs2K/month to women; eight free LPG cylinder each year to every household
SAD: 400 units of free power; Rs2K/month to women heads families having blue card; interest-free loan for students
AAP: 300 units of free power; Rs1K/month to women over 18; free healthcare for all
State borrowing more
Each day the state needs Rs106.40 crore only to repay interest and return the principal loan amount. When the state is borrowing more to repay interest on acquired debt, can it afford the doles being promised to voters? It is for the voters to decide whether they want to fall in to these sops. — Dr M S Sidhu, economist from Ludhiana
Tax machinery not proficient
The problem is not dearth of revenue, but the tax machinery is not geared up to collect taxes. The loopholes in tax collection need to be plugged. But political class uses state’s resources to benefit their own enterprises. As a result, the state remains in poor fiscal health. — Dr Lakhwinder Singh, economist from Patiala
